Unintended consequences of listing regulations
Regulations governing the access, distribution and display of residential real estate listings changed many industry dynamics over the past 20 years.
Traditionally, brokers and agents paid dues to access and view cooperative listings aggregated by their local multiple listing service (MLS) organizations.
With the rapid commercialization of the Internet in the late 1990s, the money started to flow as technological change opened a direct display of listings to consumers, mirroring what was happening in other industries (such as travel).
The industry’s trade group, the National Association of Realtors (NAR), helped Homestore, the predecessor to Move and realtor.com, thrive. In the beginning, realtor.com paid MLSs or brokers for support and listings. An article in Realty Times stated the price could be up to $3 per listing. Realtor.com crashed when the first tech bubble popped due to a trail of accounting irregularities. NAR and those with vested interests helped realtor.com eliminate these “pay by the listing” fees — but not the preferential treatment.
This free access to brokers’ listings for realtor.com set a precedent for all of the portals and accelerated who won and lost value in the real estate space for the next decade. When the dust had settled, Zillow, Trulia and realtor.com created billions of dollars of market capital value where none had existed. The portals did this by exposing listing data on a national basis and winning over consumers via technology platforms, product and marketing expertise.
Read the complete Inman.com article here.
by Brad Blumberg
Brad Blumberg is a licensed broker and the founder and CEO of Smarter Agent, the largest mobile real estate app company in North America.